Sam’s Club tries to find its balance with job cuts
Last week, Sam’s Club announced it was laying off about two percent of its workforce, roughly 2,300 people, in an effort to bring its club staffing in line with performance. For many industry watchers, that news translated into Sam’s looking to bring its costs down so that it could increase profitability and, in turn, improve its competitive situation versus chief rival Costco and others, including Amazon.com.
Until now, according to the retailer, all Sam’s Clubs were staffed similarly, regardless of performance. Management has also come to believe the organization is top heavy. Just under half of those losing their jobs will be salaried assistant managers.
"We felt this was the right move to make sure we are positioning ourselves for growing in the future," said Bill Durling, a spokesperson for Sam’s Club, told The Associated Press. "We are trying to rebalance our resources in the field to make sure we are investing in the clubs that have the higher growth potential and balancing resources across the chain."
According to The Wall Street Journal, Sam’s made a similar move in 2007 when it consolidated 3,000 salaried manager positions at its clubs. Since that time, however, the number of managers has steadily risen until the chain made its latest move.
Affected salaried employees will continue to get paid for the next 60 days while they are given the opportunity to apply for other jobs with Walmart. Those who fail to find positions will be offered severance packages at the end of their employment.
In related news, Walmart announced it was closing its lone Más Club membership warehouse. The club, which opened as a test in 2009, was intended to offer merchandise targeted for a Latino audience.
- Wal-Mart to Lay Off 2,300 Sam’s Club Employees – The Wall Street Journal (sub. required)
- Wal-Mart to cut 2,300 workers from Sam’s Club stores – The Associated Press/NBC News
- Wal-Mart’s cuts 2,300 jobs at Sam’s Club – Reuters
- Wal-Mart Stores to close chain’s only Más Club – Houston Chronicle
Will the layoffs announced by Sam’s Club help improve its competitive position against Costco and others? What else must the chain do to achieve growth and gain market share?